Itaú Asset Management, the asset management arm of Itaú Unibanco, Brazil's largest private bank, recently recommended in its year-end research report that investors allocate 1% to 3% of their portfolios to Bitcoin in 2026.
Bitcoin can diversify investment portfolios and hedge risks.
The main rationale for this recommendation lies in Bitcoin's low correlation with traditional local assets. Renato Eid, Head of Beta Strategy and Responsible Investment at Itaú Asset Management, points out that Bitcoin's lack of significant correlation with stocks, bonds, and Brazilian local market assets effectively enhances portfolio diversification. Given the current geopolitical tensions, inflationary pressures, monetary policy uncertainty, and increased volatility in the Brazilian Real, Bitcoin can serve as a hedging tool, particularly relevant for Brazilian investors.
Small and stable investment in Bitcoin
However, Eid emphasized that while the bank recommends investing in Bitcoin, a cautious and disciplined approach is advised. He stated, "Our philosophy is not to make crypto assets the core of a portfolio, but rather to include them as a complementary component—adjusting the size appropriately according to the investor's risk tolerance."
He also cautioned investors against trying to time the market, suggesting instead that they maintain small, stable Bitcoin investments with a long-term perspective. This would not only partially hedge against the impact of currency devaluation and global market volatility but also allow investors to access potential global returns. Eid further wrote, "This requires discretion and discipline: setting a strategic proportion (e.g., 1%–3% of the total portfolio), maintaining a long-term perspective, and resisting the temptation of short-term noise."
The report’s recommendations align with trends among major international institutions, such as BlackRock’s recommendation of a 2% Bitcoin allocation and Bank of America’s allowance of up to 4% Bitcoin allocation, demonstrating that institutional investors are embracing crypto assets in a more proactive yet rational manner.
